Interest rates cut to 2.25 per cent

Interest rates cut to 2.25 per cent

The Reserve Bank of Australia has cut interest rates by a quarter or a percentage point, to a new record low of 2.25 per cent.

Previously, the official cash rate had remained steady at 2.5 per cent since August 2013.

In a post-meeting statement, Reserve Bank Governor Glenn Stevens said the desire to lower the already falling currency was behind the move.

Property Analyst Tim Lawless says if the rate cut is passed on in full by the banks, it will take the standard variable mortgage rate down to 5.7 per cent, the lowest home loan rate Australia has seen in 1968.

Federal Treasurer Joe Hockey has welcomed the move, saying it will come as relief for households who are struggling to pay their mortgage.

“This will put an extra $750 a year into the pockets of a typical Australian family with a mortgage of $300,000,” he said.

But Mr Hockey has denied the decision is an indication the Australian economy is in trouble.

“The Government will continue to repair the Labor mess and get the budget back on track so that the RBA has the capacity to move on interest rates in the future should it need to,” he said.

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Libby Dreyer
Libby Dreyer 1729 posts

<p>Libby has worked as a Senior Journalist at National Radio News since February 2011. She graduated with a Bachelor of Journalism from the University of Canberra in December 2010.</p>

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